South Africa’s Standard Bank is yet to hit its desired 75 per cent stake in Kenyan listed firm Stanbic, a shareholders’ meeting was told.
Speaking in Nairobi when the listed lender announced 46 per cent net profit for the year ended December 31, Stanbic Holdings chief executive Greg Brackenridge said the mother firm will not get to 75 per cent limit.
Standard Bank shareholding in Stanbic is in the margins of 70 to 72 per cent. We are comfortable with that threshold. A stake of 75 per cent and above will be above regulatory threshold,’’ Brackenridge said.
In 2015, Kenya abolished restrictions on foreign shareholding in listed companies to ease market competiveness.
The amendment to the Capital Markets (Foreign Investors) Regulations abolished the 75 per cent threshold of foreign ownership in listed companies but gave Treasury CS powers to prescribe the maximum foreign holding in an issuer or listed company that is considered of “strategic interest.”
The South African lender had in May last year planned to buy up 59 million shares valued at Sh5.6 billion in the NSE listed firm to push its shareholding to 75 from 60 per cent.
It however failed to meet the threshold after it only managed to buy 31.6 million shares worth Sh3 billion in an offer that ran to July 3rd, pushing its stake to 68 per cent.
When the offer period expired, the multinational lender applied to the Capital Markets Authority (CMA) to be allowed to buy more shares in the open market to hit its target.
Standard Bank’s bid to raise its stake in Stanbic is coming a decade after it merged its Kenyan operation then, Stanbic Bank Kenya, with CFC Bank, which included CFC Bank, Heritage Insurance, CFC Life and CfC Financial Services giving birth to CfC Stanbic Holdings as the listed entity.
In August 2016, CfC Stanbic Holdings shareholders overwhelmingly approved the name change to Stanbic in an extra-ordinary meeting in Nairobi.
“We continue to actively seek opportunities to partner with businesses and individuals to unlock their potential and contribution to the economy. This is inspired by our belief and commitment to this market, which has been our home for over 100 years, and whose growth we are committed to drive,’’ said Stanbic Bank Kenya chief executive Charles Mudiwa.
The goup’s net profits grew 46.5 per cent to hit Sh6.27 billion compared to Sh4.3 billion in 2017 on positive revenue across its subsidiaries.
Earnings per share stood at Sh15.88, an improvement from Sh10.90 posted the previous year.
Stanbic Bank reported a profit of Sh6.17 billion up from Sh4.33 in 2017 while SBG Securities, the brokerage arm of the company recorded a 139 per cent net profit growth to Sh77 million up from Sh32.2 million the previous year.